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Tag: Founder

Best Indian Founder

of 2018

or the entire last decade 2008–2018

Is Undoubtedly Lee Fixel of Tiger Global.

Every founder attempts to create value. It is not that hard. If money is handed out for a purchase, it is bound to create a consumer surplus. As Bill Gurley, legendary VC at Benchmark Capital says

To turn it into a business it is critical to capture some of that value back. Best founders are those that are good at capturing value after creating it. Capture that value for themselves, investors and employees.

Employees even in a typical valley based startup don’t make much money. As Hunter Walk, VC at Homebrew Capital says

Lee made two of his employees near billionaires and close to 200 others multi-millionaires.

When Lee first moved into India he was branded a casino capitalist. But thanks to him the entire venture capital industry that was being questioned for returns got two decades worth of lifeline to continue.

As per the research by Prof Thillai Rajan in 2018, “Mean returns of Indian PE-VC startups investment is 13.25% in the decade 2008–2018”. In the US these return average 15–20%.

In the previous decade, i.e 1997–2007, many reputed global VC firms that came to India bolted back due to inadequate returns. In the next decade till 2017, about $16b of investment by VC had been done in India. Only $4b had been recorded as exits. By orchestrating Walmart Flipkart acquisition in 2018 Lee added $17b to the tally of exits to take it to $21b.

Else the 13.25% return of the VC asset class may not have been possible.

For just that one reason he must be celebrated.

Even technology natives like Google, Microsoft, Intuit, Yahoo have a poor track record in integrating and digesting an acquisition. It will be harder for a non-digital incumbent like Walmart. It is anyone’s guess whether Flipkart will be an albatross on Doug McMilon’s (CEO of Walmart) neck. Chemistry between Walmart and Flipkart culture seems like water and oil, not something that is easy to mix.

But that is a story for another day.

A tremendous amount of wealth transferred into the hands of commoners who could have otherwise not imagined hitting such a jackpot.

For his stellar performance, we cherish Chris Gayle as our top IPL player. Similarly, Lee Fixel is our best Indian startup founder.

He showed how to capture value, spread wealth to startup employees and saved the entire VC Industry in India.

Disclaimer: I am in no way connected to Lee Fixel or Tiger Global. Have never met him. Neither did he influence any of our common friends to write this 🙂

Just admiration for someone who fueled a new reality.

When Mario plays Soccer

Can he become a Super Mario?

Everything about the future is so clearly visible when looked through the rearview mirror.

Wish I knew what influenced outcomes for a tech startup founder in India.

When you look back decade-long to sketch the picture from 2007 till now, leaving out the frenzy of funding peaks & disappointment three distinct picture emerge.

In all cases, the rules of the games for Indian founder are not apparent. The game itself is very different.


First in how consumer technology businesses are built, second how enterprise business evolves. And the third in how technology led acquisition happens.

Software is eating an unevenly distributed world of India

Wiliam Gibson, the famous science-fiction author has said, “The future is already here, it’s just not evenly distributed”

When you spread technology on the world, the thinnest layer gets cornered in emerging markets like India. Combine that with what Andy Rachleff, founding investor of Benchmark Capital has noted “Software is eating the world” it is easy to make sense of consumer tech in India.

It turns out that

Google for India is Google. Not Guruji as Sequoia had thought.

Facebook for India is Facebook, Not Minglebox, Sequoia’s second such bet.

WhatsApp for India is WhatsApp. Not Hike as Airtel had thought.

Jury is still out on whether Amazon for India will be Amazon. (Looking at the skeletons that are tumbling out of Walmart India’s closet, the last word on this may be by Amazon)

Also, the Jury is still out on whether Ola will be Uber of India. Only time can tell.

In a winner takes all market, only one rule exists. Become biggest & largest at any cost. Not just in that geography but globally.

If you are not #1 then you don’t exist.

You can exist for 2 years, maybe 5 years but after a decade only the last man standing residues in the mind.

Once a category is taken, it is better to go after a new one, AgriTech is the flavor of today. Or invent a new one like the mobile mediated ‘Handyman Services’

In all this as Bill Gross, founder of Idea Labs says, timing matters more than anything else.

TIming is the difference between IndiaPlaza & Flipkart.

Selling to Assisted Buying

There is a bigger story than cursory ones on Freshdesk & Zoho reveal.

In 2009 all SaaS revenue as a % of Enterprise Software globally was very small, less than 3%. In 2018 SaaS revenue is more than one-fourth of total Enterprise Software revenue. Given the rate at which SaaS is growing, it will not be a surprise if 90% of revenue of all global Enterprise revenue turns SaaS in the next decade.

This is happening because of an important shift, shift in how software purchase process happen. It has moved from selling to assisted buying.

This shift has provided a big edge that Zoho & Freshdesk leverage. If the product trial experience is good enough, price not too large you can close sales remotely sitting in any part of the world.

Sales acquires a new meaning here, it is not being the door to door roaming water filter salesman, but the sales assistant inside Levi’s jean showroom helping customers try out a fitting and gently nudging them to make a purchase.

In this type of sales, you don’t always be closing, you land quickly and always be upselling. Here the product has to take the lead on triggering emotions and do the initial sell by itself.

Enterprise software never had a winner takes all behavior. Many companies in a category can co-exist sustainably. Several Indian startups have therefore mushroomed in global SaaS

Fear meets greed on a treasure hunt journey

Only a handful of startups grow like a rocket ship to become some of the largest companies in the world.

Majority of them walk down the path of an acquisition. Whether planned or forced this entire process looks like dark art.

Walmart tried partnering with Airtel and Tata group independently to gain entry India and both failed, It felt the heat in the US with Amazon and China market was shut to outsiders. Getting into India was crucial in defining the new phase of the company their stake in the $100b+ market of global online retail.

Billions were at stake for Flipkart, smart late-stage investors pushed the right emotional buttons at Walmart to extract a huge strategic multiple.

In a much smaller case, AthenaHealth from Boston was heading for mobile-first world, their gap in mobile product offering led them to pay $60m in cash to Praxify in Pune. Or most recently Nutanix’s repositioning in the market from hardware box to SaaS company in the public market led them to make a spate of acquisition including the acquisition of Bangalore based Minjar.

In the startup land, a key thing that is missed is what happens in the terrain outside is more important than what happens inside in the making of the startup’s engine.

When a large technology company goes after the same future that a small startup is heading, a lot of emotions get triggered amongst all the players.

A heady concoction of fear and greed inside the large company trigger conditions for the acquisition of the startup to unfold.

This is mostly serendipity and sometimes engineered

A challenge for Indian founders is that even when aligned on the future direction conversations of merger and acquisition don’t happen.

This is because startups don’t come on the radar of the global corporations often enough.

Which explains the lackluster M&A ecosystem in India.

Therefore, it is important to know the play

As is the game, so is the play.

If playing in a winner takes all market, must find a way to be the biggest & largest not in just a geography but in the entire world. And Time it right.

In enterprise software, it is about nurturing a product led, inside sales DNA not the suitcase hogging salesman tribe of the yesteryears.

Finally, for technology-first business, with an acquisition as a likely outcome, it is creating the condition for coming in the radar of a strategic.

Not getting the game being played will see the Mario do a lot of activity.

Which may err into a foul and not becoming a SuperMario.

Choosing right market can save upto 18 months of runway

[original post 20 Sep 2016, migrated from ubedge.com]

Starting point of a startup is an idea and it goes through a journey of product releases and pivots to reach its product market fit and further scale. Source of this idea is a brainstorming session or hot flavor of the season (FoodTech, Fintech etc). Sometimes it comes from past work experience of the founder. In rare cases it is rooted in an unsolved customer pain point.

For Indian software product startups when looked at through the lens of market segments a pattern seems to emerge that is hard to ignore.

Market Map

A 2 X 3 matrix


Parsing the market map

  1. Before 2009 India consumer was not a major open digital market. There were few online ticketing sites, many attempts in the e-commerce space that did not grow out in a big way. Telecom VAS a closed market existed only because of regulation gap around strong consumer privacy laws . In 2009 something happened along with the birth of Flipkart where consumers changed behavior. They started believing that they could trust doing online transactions and swiped their cards. It would be hard to attribute a causal reason of whether it was ‘Cash on Delivery’, critical mass of people on internet or myriad of other reasons. It is suffice to say that market behavior changed since then. Today there are countless new ideas being tried out because this market has opened up.
  2. India SMB market is yet to witness its Flipkart moment. I have been a close observer on two industry (read multiple organizations collaborating efforts) attempts to wrench open this and closely involved in my last role in leading multiple experiment in creating this market. While I am very bullish about this market but the fact of the matter is that this market is yet to open up. Just like how consumers shifted mindset about transacting online, small business need to change their buying ‘tailored shirt’ mindset to buying ‘branded shirt’ mindset for this market to explode. Open API based GST system in India may cause to be a major reason of change here.
  3. If India consumer has already exploded and India SMB is around the corner, India Enterprise is yet to germinate. There are handful few startups that have been able to sell to Indian CIO, they are exceptions than the rule.
  4. In the Global consumer market there is hardly any precedence of a startup from India i.e. equal to a Facebook or Snapchat. Not that this may not happen, odds are low. This is because it is very hard to understand global culture nuance when based in India. Risk capital available to try out radical business models are not present. There are handful instances where this is being attempted such as Zomato, Hike but the jury is still out.
  5. Indian startups are rocking the Global SMB market, strategic inflection point that has made this possible is that small business are searching for solution to their problems online. When solution is possible to be delivered online through Saas, the purchase consideration is based on the experience of solution (try and buy) and not based on the trusting the salesman who delivers the software CD. Given this dynamic it does not matter if the solution was built in Alabama or Alwarpet in Chennai. Comparative cost advantage of doing desk based selling from India makes it possible for price points unimaginable in other parts of the world . This is in turn opens many low end markets that have been earlier priced out. Companies that are trend setter here are Zoho, Freshdesk, Wingify, KissFlow, Kayako, ChargeBee, Hotelogix and many others.
  6. There is also good precedence of traction for the Global Enterprise with more than handful examples. The pattern here has been to prove product with pilot customers in India and scale it faster with global market selling. This involves migration of feet on street sales team globally, iflex has been the Zoho equivalent grand daddy to set the precedence here but recent examples are Druva, Eka and newer folks like Innovaccer, Unbxd are following suit.
  7. There are startup ideas that are tech components and may sell into a value chain into one of these market and not directly, for example a developer toolchain. The effect of traction in the market has same implication for them.
  8. The above map is not going to be static map and is bound to change. Certainly past is not an indicator of future however history of technology has taught that path dependency plays a huge role in shaping of markets. Thus realization of this map has allowed few startups have change their gear in reaching product — market fit or scale. Also this map helps understand that playbook for winning a market is a different than a playbook for creating a market.

To quote Marc Andreessen

When a great team meets a lousy market, market wins. When a lousy team meets a great market, market wins. When a great team meets a great market, something special happens.

What are the market maps that you are seeing ?

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